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From ‘America first’ to ‘America alone’

  • Published at 10:21 pm July 5th, 2018
  • Last updated at 10:23 pm July 5th, 2018
Bad for world trade?Bigstock
Bad for world trade?Bigstock

Is the US on the brink of a global trade war?

Whilst the world delighted over the landmark US-North Korea summit in Singapore, which boosted hopes for the long-elusive peace on the Korean peninsula, the Trump administration quietly started a new battle. 

Interestingly, President Trump has shown disdain over trade with EU. According to him, as a trading partner, the EU is “possibly as bad as China, only smaller.”

At this point, one needs to turn to some scenarios. First, the US has imposed tariffs of 25% on steel and 10% on aluminum imports from Canada, Mexico, and the EU. 

Also, the EU has retaliated with tariffs on motorbikes, orange juice, and whiskey, targetting Republican states, bringing the US closer to an all-out trade war. 

On June 22, the EU imposed $3.3 billion worth of tariffs on US goods.

As these things stand, the EU seems to have been quite measured in terms of its response with these tariffs targeted specifically at the key states, particularly in the context of the midterm elections near November, and they’re designed to have more of a political effect rather than economic. 

From the US’s point of view, they’re preaching the supposedly dead mercantilism. But what they are telling Donald Trump is that America is strong today, in 20 years America will not be in the same position. So, the time is now to strike. 

They’re saying that this is the only time that the US can reassert itself and prolong its stay at the top. 

Now, this is all wound into American exceptionalism that the US must be politically, militarily, and economically the hegemon in the world, in order to guide it towards this liberal capitalist democracy. 

The consequence of the “America first” strategy is that America will find that there are costs to be paid from putting itself first. One of the costs is that other countries will seize the initiatives and start setting rules that are less favourable to the US, and more favourable perhaps for the other countries in other regions. 

The irony of course is that it was past American presidents who created the multilateral trading system and they saw it as an extension of American power and American prosperity, and normally when hegemonies decline, they try to extend the period for which they are powerful. 

And it would be in American interests to try and preserve the system that it has created in its own image and therefore prolong its power. Instead of that, Donald Trump has taken a completely different approach, which is to say: “Actually, we’ve been cheated, and I’m going to blow up the system.”

It’s a slightly bizarre situation when the world is watching one global superpower masquerading under a victim complex. The question that naturally comes: Who’s treating the US unfairly? 

Going back to one of the earlier points, does the US’s retreat from the world provide opportunities for other nations to take initiative? 

Trump pulling out of the Trans-Pacific-Partnership allowed the EU to finalize its agreement with Japan. We’ve seen that the EU opened up negotiations with Australia and New Zealand; it has just upgraded its agreement with Mexico. In all of these agreements, the EU is exporting its own regulatory frameworks, its own way of doing things.

Also worth noting is that Trump’s behaviour is erratic - one minute he’s threatening, the next minute he’s ready to compromise.

One minute there’s a trade war with China, the next, he’s best friends with President Xi. Incidentally, when these tariffs were initially threatened, we saw them being suspended quite quickly.

So, with Trump and his unpredictable behaviour, it’s hard to say what his next move will be. 

President Trump is destroying global geopolitical order, pulling out of the Paris Agreement, rejecting the Iran nuclear deal, starting a trade war with US’s closest allies, often adopting a disdainful attitude towards them.

His actions are posing a threat to the global state of affairs, be it on financial, trade, or environmental terms. Since each of these dimensions magnify the others, his actions may be seen as efforts to obliterate an old system to set up a new one where Trump’s caprices will be the defining factors with his “America first” ending up being “America alone.” 

It won’t be an exaggeration to say that if this continues and isn’t resolved soon, the US is going to find itself into isolationism. It’s going to find that the world around it is changing and perhaps not in the way it likes. 

It will be a complex scenario, worth watching with caution. It will cast a long shadow on the rest of the world. 

Md Sharif Hasan is a commentator on international politics, and is currently working as a field researcher on behalf of the Centre for Genocide Studies (CGS), University of Dhaka.

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